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(May 13, 1907. cerned, being of opinion that in this matter said that there is a custom of the trade | Bank had made advasses to the vendors of pledge and saie stand on the same footing, to treat these certificates
warrants he tia. They claim na such ašmígnees a there has not been a sufficient appropriation Now, in the first place, there is no evidence of declaration that they are entitled to of the bags, of flour to enable me to hold such a castom. That these certificates are first charge on all the slabe of tin to the extent that the property has passed to the Fat often pledged, and that as between the party of $49,223.15, the amount which the Company Kee and Hung Shun firms or to the Yan Oo. who pledges them and the party who advanced has prid to the Bank on the failure of Hung The judgment of Limdley L. J. in Mills v. money they would be evidence, of an equitable Seng Cheong to meet the bills drawn on him, Charlesworth (25 Q. B. D. at p. 425) was charge, is, I think, very probable." So in the und which he had accepted. Bán Tin Kee and referred to, where he says: "In point of law case of a godown warrant :—It is an acknow- Thong Seng also claim a declaration that, sub- possession of goods may be changed by agree-ledgement that the godown keeper has so ject to the charge in favor of the Koo Guan, ment without any physical change in their much floor deposited with him by a person they are entitled respectively to the 290 slabe position, or in the position, of the person who whom he assumes to be and treats as the true and the 300 slabs, as unpaid vendors who had actually guards them. The right to possession owner, or at least the person entitled to posses reserved to themselves a right of diapoml of and may be transferred by agreement and the sion: coupled with an undertaking to deliver the the property in the said slabs. These two plain- character in which the custodian holds them goods
to any
who produces the tiffs having sold their respective consignments may be changed by attornment." Unquestion. warrant or to any one to whom, in ccordance of tin to the Hang Seng Cheong, in accordanoG ably but this is subject to the settlement of with the original godown, the warrant is endors- | with the contract, drew on that firm for the price the prior question-Is there a possession which ed. In this case there was a provision for at thirty days, negotiating the bill of exbhange may be changed? In other words once the greater safety as to the use of certain chops in with the Hoogkong and Shanghai Bank branch goods are ascertained the above principle connexion with the endorsement. Title to the at Penang; the Bills of Exchange, which were applies, but not before, The case shows property is the absent element in the original { indorsed in blank by the vendors, were sent to the importance of attornment of a godown contract of storage, and it must be absent the Bank in Hongkong, and were sacepted by keeper when the question is, has there been a throughout so that the warrant never is, and the Hang Seng Cheong on 5th January. The transfer of possession: such as in the case of never could be, nothing being changed in the "aihora arrived in Hongkong on or about 7th Young v. Lambert (6 Mo. P.C. 421). Precisely circumstances, a document of title. It never January. The agent for the ship in Hongkong the same principle was adopted in Grigg v. can be anything more than a document entitling was the Kam Tak Tai firm. On the same day National Guardian Assurance Co. (1891, 3 Ch. the holder indorses to the possession. Hang Seng Cheong obtained possession of the tin from the agent, informing them that the at p. 211), and many other cases which were Therefore, if persons will advance money cited. But they all decide questions which arise
at a document, they must do so Bills of Lading had not arrived, giving them a own risk the main risk, of course Letter of Guarantee. He then stored the tin after the ascertainment has taken place. Subject their
soma one with an to the question of estoppel this really disposes being, that
actual in the Hop Yick Godowns, and on the 9th of the case but there were other incidents document of title-the bill of lading-may | J·nuary pledged 150 slabs to the Yan On Co. of the pledge which I must notice, if only turn up and onst them from their possession. for $10,000. On the 10th hy pledged 150) more show that I bare not overlooked Bat looking at the case from the point of view s'abs to the same company for a like amount : them. His Lordship having shown this
of the delivery order, on which some stress was and on the lith he pledged 220 slabs to the proceeded.] I am told that it is the practice in laid, and as if there had been such an order, King Kee for $15,000, depositing the the Colony to advance money on godown war- again the prior question comes to the front in respective golown warrants with the lealers,
such a case ая the
present: Was rants, that they are in fact looked on as docu-
on which endorsements of the pledges were made. The Trustee in the binkruptcy of ments of title, and that a decision adverse to the possession? i.e. Were the goods ascertained ? pledgees of the warrants will do much to shake So we get no assistance from the case of Gann Hang Seng Cheong thereupon took out an
the interpleader summo k and Bolckow Vaughan in
an issue the foundations on which the commerce of the
support of Colony is based. Obviously it is hard that a plaintiff's claim. And if the delivery order is ordered in which the Kim Guan Co., Ban Tin person who advances money in perfect good of no use by itself to pass the property in the Kee and Thong Seng were mad. plaintiff✨, faith should, when a fraudulent bankruptcy absence of ascertainment, so none of the other and the Yan On nod King Kee firms defendsats.
are of any
On these facts the issne, with which the Court intervenes, find himself deprived of his security, facts which I have mentioned but I have simply to explain the law as I nuder- additional weight in furthering the plaintiff's is becoming almost too familiar, is again raised stand it, after the most able a d erbaustive case. After discussing decisions the in consequence of the fraud of the purobaser
of As law
bitween the estoppel AL arguments on both sides, and to enforce it.
great length, His of the goods in question, sa weat on : A it is, I Willes J. raid in Meyerstein r. Barber (L.K. | Lordship
massignees of the Bill of Liding and the holder it by
He seems to have C. Coventry 1, C.P. at p. 51) "I must not consider what bourd
[Woodley
of the godown warrant. may happen to persons who omit to use though I do not understand it. And the
been a past master in the art of discovering
in the commercial sys... · vigilance, and consequently have the misfortune effect of the decision is that the property passed. the weak spots
them to be over-reached."It is however expedient The creditors of Kwon Yick Wo, who are that I should say something as to the nature of represented by the Official Receiver, are not godown warrants, which seem to be treated as bound by the estoppel, and so far as the if they were documents of title, as to which bankrupts estate is concerned, the plaintiff there is much that is opposite to the practic of cannot set up this estoppel. The result is this, advancing money on them, in Gunn v. Bolokow That in the action for trover against the Po Vaughan and Co. (L.R. 10 Ch. App. 491) Ou and Chan-Wai Chee, the plaintiff fails, and There was in that case a wharfinger's certi- the defendants are entitled to judgment with ficate the effect of which, as provided in the costs, and in the interpleader issue, the plaintiffs contract, was that "payment of certain goods also, as against the defendants fail. It may be was to be made by buyer's acceptance of seller's however that they have a charge on the property drafts atsix months against inspector's certificate which would be good against the trustee in of approval, and wharfinger's certificate of each bankruptcy; but this point was not sufficiently 500 tons being stacked ready for shipment argued for me now to decide it. On the other Mellish L. J. said: "It professes simply to be hand, Chan Wai Chee in spite of his judgment in what it is, a certificate that those tons are
the action of trover, must still establish his title, ready for shipment. It is merely a scurity to in the interpleader issue: as also Chan Wai Chee, the bayer that such things are actually there. Chai Kee, who is not a party to the action of The matter now really passes into the It is not the same thing as the inspector's trover. certificate. The inspector examines the rails region of bankruptcy : bat as the trustee is s while they are being manufactured at the party to the issue, the further questions can be manufactory, and certifies that they are properly debated as arising out of the issue. It cannot made. The wharfinger certifies that those rails be said that the result of the unravelling of have been actually brought down, and these complicated proceedings is other than actually ready for shipment. "It is utterly unsatisfactory to alt parties concerned. But there has been a gross and palpable fraud, and impossible, in my opinion, to make that out to be a document of title. A document of title is the consequences fall heavily, perhaps too something which represents the goods, and from heavily, on persons who have not been sufficiently which, either immediately or at some future wary to prevent them being over-reached. time, the possession of the goods may be obtain - ed. In this way a bill of lading represents the
In re the Koe Guan Co. T. v. the Yan On goods while they are at sea, and by which, when the goods arrive at the port of destination, the Marine & Fire Insurance Co., Ld., and others; possession of the goods may be obtained. So The Kos Guan Co., together with Bun Tin Kee also a delivery order is an order for the delivery and Thong Seng sued the Trustee in the the Hang Seng Cheong firm of the goods either immediately or at some future | Bankruptcy of time; generally immediately on the presentation | in respect of the various rights which of the delivery order the party is entitled to the they allege they possess in connexion with two goods. Therefore it represents the goods. It consignments of tin, one of 29) slabe, the other | is perfectly plain that the certificates were never of 300 slabs, which were sold to Hang Seng intended to represent the goods, and the goods. Cheong, and consigned to that firm by the 14. 8. could never have been obtained by it There Waihora on or about_23rd December, 1904, can be no doubt that the man who would hold from Penang. The Koe Guan Co. are the They are also the the bill of lading would be entitled to the'owners of the Waikora. goods, because that is a real document assignees from the Hongkong and Shanghai of title which represents them. Then it is Bank of the documents in repect of which the
+
are
TITLE TO GOODS IN GODOWN.
tem
of the west, and turning to his profit, leaving, for a second time, two innocent parties to fight it out over the relics of bis fraudulent purchases in his- bankruptoy. Eroept as to the minn »r in which the wrongful possession of the goods was obtained, the case is identical with that tried before me last November, between Khoo Teok Seong and the Hang Yas Bank, in which the trouble was brought about by another fraudulent device of Hang Sing Cheong. The plaintiff relies on my judgment in that case, which disposes of many of the points raised in the Statement of Defence : and in which I decided that the title of the holder of the Bill of Lading must prevail against that of the persons who had on the godown_warrant. advanced, money I am of opinion that the case for the defen- dants fails." It may be very hard on persons who have advahood money with perfect good faith that they should be deprived of the pro- perty pledged them but if people will advance money on pledge of property to persons who allege that they are the owners, taking for security hypothecation of godown warrants merely, without verification of their title, and without enquiry whether a living_Bill of Lad; ing is outstanding, they must take the conse quences. And all this elaborato argument which has been advanced on their behalf serves only to re-inforce the old-established principle that the title of the bona fide holder- of the Bill of Lading must prevail. There in only one question remaining as to which I feel the same difficulty that I felt during the trial. I do not understand the joinder of the two plaintiffs who seem to me to be suing in in- dependent rights: the second claiming only in the event of the first plaintifs falling, or in respect of any balance remaining after the first, - plaintiff has been entisfied. I think they have an interest in the tin and that the right cinimsed is good, but I do not understand the prosedure adopted to give effect to it. From what i have said i think Koo Guna in entitled to judgment. But the question of the other plaintfits should
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